THE MARTEL MAIDES GUERNSEY PROPERTY MARKET REPORT 2015
There’s no doubt that it’s been a tough year generally for all too many businesses involved in the Island’s property industry as the number of year on year transactions reach new lows and house prices have fallen for the first time in a generation. While the temptation may be to enjoy a bit of schadenfreude at the estate agent’s expense, it’s worth reflecting that a depressed market also affects surveyors, mortgage advisors, banks, conveyance and wills departments, the whole of the construction industry and, last but no means least, the Island’s own revenues from document duty.
On reflection, this has been a long time coming with the recessionary effects from 2008 and subsequent years having been held back by the initial strength of Guernsey’s economy. It’s only over the last couple of years that we’ve started to see the impact of restricted lending, concerns over jobs, and a general lack of confidence which has seen any sense of urgency vanish from the market and a tendency for many potential purchasers to just sit on their hands and wait to see where things go.
Taking an overall look at many aspects of business life now, there’s a real sense of frustration brought on by increasing levels of bureaucracy and red tape which pervades all parts of the island’s commerce and there’s a sense that Guernsey is at a crossroads in terms of its future direction. Certainly, major choices and decisions face the Island’s population and it’s likely the electorate will have a significant influence over these through the Deputy Elections in 2016.
The Population Management debate was started on the premise of endless budget surpluses and the need to curb growth. Today, most business interests see the need for an urgent reversal of that policy.
The new focus on growing our working population is perhaps the first step in the right direction of addressing the future direction that Guernsey takes. While some ‘baby boomers’ may argue for an ‘Isle of Wight’ style economy, surely the younger generations deserve the same opportunities and advantages as their predecessors.
Local Market Residential
It’s more than likely that we’ll look back on 2015 as representing the slowest year for residential transactions in the present cycle, although it’s likely that prices will continue to adjust until we see any marked pick-up in demand. For the time being, motivated sellers continue to determine the market. We are predicting that 2016 will mark the year that purchasers begin to recognise value for money and that by mid-year they should be starting to return in greater numbers and reverse the current trend of falling values. So, there is better news coming but it’s likely to be a slow recovery until a confidence returns.
Despite all of the above, 2015 has been a successful year for Martel Maides where long experience of dealing with differing market conditions has seen us significantly increase our market share and sell more properties than in 2014. Similarly, both Lettings and Management teams have grown to cope with a large rise in new instructions and these two departments are now very significant contributors to business levels.
We have continued to invest heavily in advertising and marketing. Our clients benefit from unrivalled coverage through various print and social media outlets. We remain the largest advertiser in the Guernsey Press and recognise the community benefits from supporting a daily local newspaper. All this, and the improved use of technology and further staff training, has delivered success to our clients and applicants.
Open Market Residential
The Year 2015 echoes the last few years in terms of transaction levels with the number of Greffe registered sales remaining stubbornly at around the 50 mark. What was once considered a short term blip has now developed into a seven year hiatus and an accumulation of instructions that will require some real momentum to overcome the current inertia. For the time being, conditions remain ‘challenging’ and successful vendors have either been competitive, resourceful or lucky!
However, a number of factors allow us a greater sense of optimism for next year. While we can expect the Open Market to ‘piggy-back’ on the strength of some sectors of the market in the UK and its economy in general, January 2016 will mark the proper introduction and start of ‘Locate Guernsey’. Headed up by Richard le Tocq, this new initiative should go some way to re-establishing the Island’s profile as a destination of choice for new High Net Worth residents.
It is always hard to track activity levels in the commercial sector as leases, valuations and rent reviews are not centrally recorded and only sales by conveyance can be easily tracked. These do not include sales by share transfer. However, our commercial team has had a great year in 2015, increasing gross revenue by some 25%. Analysis reveals that this is due in part to a small increase in tenant movement, but, once again, is primarily the result of a significant increase in our market share.
As for 2016, only time will tell. But if, as hoped, confidence builds in the local economy, then we look forward to further growth. One cloud on the horizon is the continuing talk, or should we say rumours, of further cutbacks and layoffs in the financial services industry, specifically the banking sector. This could throw more second generation office space on to the market and put downward pressure on rental rates. However, on the plus side, the retail sector seems to have held up remarkably well to pressure from the internet shopping boom, and there has been a steady, if unspectacular, take-up of vacant warehouse space left over from the loss of Low Value Consignment Relief a few years ago.
Martel Maides Auctions
This year market the retirement of Clive Maides and saw him step down from the rostrum after a hugely successful career in which he presided over a huge number of highly successful sales encompassing ‘lots’. Probably the high point remains dropping his hammer (not literally) on a pair of rare Chinese Bowls for just over £1 million.
While in a period of transition, James Bridges has been creating a fresh look to the team and recent successes have been a superb but logistically challenging two day Fine Art Country House Sale held at the Hotel de France in Jersey and the auctioning of the new 007 number plate for a record price.
Martel Maides & Martel Maides Auctions wish all their clients, customers and friends the very best for the New Year and we look forward to sharing continuing growth and success in 2016.